Belén Garijo - Merck KGaA

Righting the ship at a long-troubled drugmaker

Name: Belén Garijo
Title: CEO of Merck KGaA Healthcare

The German Merck has been struggling with identity lately.

As the company's notably sensitive executives are quick to point out, the centuries-old drugmaker is sole owner of the "Merck" brand in each of the world's countries save for the U.S. and Canada. But it is U.S. Merck--"our child, so to speak," as the company's outgoing CEO once put it--that seems to get more global attention, leading to an oddly defensive branding strategy from its German counterpart and sparking a legal spat between the two.

Outside the realms of court and press releases, the larger issue for Merck KGaA, Darmstadt, Germany--as it prefers to be called--is a paucity of success in drug development. The company has run into setbacks in oncology and multiple sclerosis, cutting thousands of jobs and repeatedly shaking up its executive ranks in hopes of delivering on a long-promised turnaround. Merck KGaA's last big pipeline success, the multiple sclerosis treatment Rebif, won FDA approval in 2002 and has rapidly ceded ground to newer, more convenient therapies in recent years.

But Belén Garijo, the latest executive tasked with rebuilding the storied company's R&D operation, believes the drugmaker can make a name for itself in the burgeoning field of immuno-oncology, going all-in on a treatment that could have blockbuster potential and shelling out billions for the rights to more.

Spanish-born Garijo joined Merck KGaA from Sanofi ($SNY) in 2011, ascending to lead Merck Serono, the company's biopharma division, and, starting this year, serving as CEO of the company's entire healthcare operation. From the outset, her goal was to streamline Merck KGaA's disparate priorities and amp up the company's focus on partnering.

"Transforming R&D demanded a multi-dimensional effort, starting by talent and organization, placing higher investment focus and most importantly a better balance between internal options and external innovation," Garijo said at the company's investor day in 2014, adding that Merck KGaA was unafraid to cut programs that aren't performing.

And as clinical disappointment sidelined projects in cancer vaccines and oral MS therapy, Garijo was steadfast in her support for MSB0010718C, then an early-stage antibody that had the potential to help unblind the immune system to cancerous growths and galvanize a bodily attack on tumors. Later in 2014, her faith paid off, as Pfizer ($PFE) bought into the program in a deal worth nearly $3 billion, signing on to help Merck KGaA catch up with more advanced rivals developing similar therapies.

MSB0010718C, now known as avelumab, lags behind approved therapies from Bristol-Myers Squibb ($BMY) and Merck, plus in-development agents from Roche ($RHHBY) and AstraZeneca ($AZN). But, under Garijo's leadership, Merck KGaA figures it can leapfrog the field's leaders.

Melanoma was the first target of so-called checkpoint inhibitors like avelumab, but, seeing little room to compete there, Merck KGaA and Pfizer are instead focusing on cancers they believe are underserved. They've identified the rare Merkel cell carcinoma, or MCC, as an ideal target and are moving forward in that disease with the FDA's breakthrough therapy designation. On the way are programs in gastric, kidney and bladder cancers, and the partners have embarked on a Phase III trial in non-small cell lung cancer in an effort to compete with the checkpoint agents already approved for the disease.

Whether that strategy will pay off remains to be seen, but Merck KGaA is not relying on avelumab alone to write the next chapter in its future. Under Garijo's stewardship, the company has been aggressive on the partnering front, laying out billions of dollars to partner up with Syndax Pharmaceuticals, Selvita, Intrexon ($XON), Sutro, Mersana Therapeutics and MorphoSys over the past 18 months.

And Merck KGaA has promised to spend €250 million more on R&D in 2016 than it did the prior year, hoping to lock up avelumab's first approval in 2017 and--finally--come through on the pipeline turnaround it has promised year after year.

-- Damian Garde (email | Twitter)

For more:
Syndax aligns with Merck KGaA and Pfizer on an immuno-oncology combo project
Pfizer, Merck KGaA launch two more PhIII trials for avelumab
Pharma R&D underachiever Merck KGaA gambles €250M on a PhIII comeback
Merck KGaA and Pfizer play catch-up in lung cancer with a Phase III immuno-oncology trial

Belén Garijo - Merck KGaA
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